400,000 low-income Texans forced to pay more for electricity

FOR IMMEDIATE RELEASE
August 8, 2005
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STATE FORCES NEARLY 400,000 LOW-INCOME TEXANS TO PAY MORE FOR ELECTRICITY
AUSTIN (August 8, 2005) – Today, the Public Utility Commission (PUC) is planning to send letters to about 391,000 low-income households to inform them that the 10% LITE UP TEXAS rate discount they receive on their electric bills is being terminated at the end of the month. The program is being discontinued because this spring the Legislature decided to funnel money from the electric industry system benefit fund – a fund created in 2002 for billing assistance and weatherization programs for poor, elderly and disabled Texans – to balance the state budget instead.
The system benefit funds are collected from ratepayers in deregulated areas of the state on the basis of how much electricity they use. The average residential electricity customer pays about 65¢ per month. Annually the fee raises about $200 million. Customers in deregulated areas of the state will continue to pay this fee for the next two years, but the proceeds will not go to help low-income Texans afford electricity, rather it will go to the state’s General Revenue account.
“This was a highly successful program, but funds have been confiscated gradually by the state over the past two Legislative sessions,” says Carol Biedrzycki, executive director of Texas Ratepayers’ Organization to Save Energy (ROSE). “Instead of LITE UP TEXAS, we have LITES OFF TEXAS,” she added.
At its peak there were almost 800,000 households receiving a 17% discount on their electric bills. That has gradually eroded in the past two years as the discount was first lowered to 10%, then last year the PUC adopted new rules making it harder to qualify which resulted in 350,000 households being dropped off the rate discount in one month.
“This is a new tax that will increase out-of-sight electricity rates another 10% for people who are already spending as much as 47% of their income on utility bills.” says Randall Chapman, executive director of Texas Legal Services Center. “Balancing the budget on the backs of low-income Texans is bad public policy,” he added.
“A key promise to low-income Texans when the state was choosing to deregulate electricity was to establish assistance programs to make sure the new market worked for everyone,” said Tim Morstad, a policy analyst with Consumers Union. “That promise has been broken.”